Extracted from The Shock Doctrine: The Rise of Disaster Capitalism by Naomi Klein.

As George Bush and his cabinet took up their posts in January 2001, the need for new sources of growth for US corporations was an urgent matter. Bush's solution was for the government to deconstruct itself - hacking off great chunks of the public wealth and feeding them to corporate America, in the form of tax cuts on the one hand and lucrative contracts on the other.

Then came 9/11, and all of a sudden having a government whose central mission was self-immolation did not seem like a very good idea.

“September 11 has changed everything,” said Ed Feulner, old friend of Milton Friedman, the guru of unfettered capitalism and president of the Heritage Foundation. Many naturally assumed that part of that change would be a re-evaluation of the radical anti-state agenda that Feulner and his ideological allies had been pushing for three decades, at home and around the world. After all, the nature of the September 11 security failures exposed the results of more than 20 years of chipping away at the public sector and outsourcing government functions to profit-driven corporations.

The first major victory of the Friedmanite counter-revolution in the United States had been Ronald Reagan's attack on the air-traffic controllers' union and his deregulation of the airlines. Twenty years later, the entire air transit system had been privatised, deregulated and downsized, with the vast majority of airport security work performed by underpaid, poorly trained, non-union contractors.

On September 10, as long as flights were cheap and plentiful, none of that seemed to matter. But on September 12, putting $6-an-hour contract workers in charge of airport security seemed reckless. Then, in October, envelopes with white powder were sent to lawmakers and journalists, spreading panic about the possibility of a major anthrax outbreak. Once again, 90s privatisation looked very different in this new light: why did a private lab have the exclusive right to produce the vaccine against anthrax?

The backlash against the pro-corporate consensus only deepened in the face of new scandals such as that of Enron. Three months after the 9/11 attacks, Enron declared bankruptcy, leading thousands of employees to lose their retirement savings while executives acting on insider knowledge cashed in.

While CEOs were falling from their pedestals, trust in government was higher than it had been since 1968 - and that, remarked Bush to a crowd of federal employees, is "because of how you've performed your jobs". The uncontested heroes of September 11 were the blue-collar first responders - the New York firefighters, police and rescue workers. Suddenly, America was in love with its men and women in all kinds of uniforms.

When Bush stood with the firefighters and rescue workers at Ground Zero on September 14 he was embracing some of the very unionised civil servants that the modern conservative movement had devoted itself to destroying.

For weeks after the attacks, the president went on a grand tour of the public sector. He praised not only emergency services personnel but teachers, postal employees and healthcare workers. At these events, he treated work done in the public interest with a level of respect and dignity that had not been seen in the US in four decades.

But far from shaking their determination to weaken the public sphere, the security failures of 9/11 reaffirmed in Bush and his inner circle their deepest ideological (and self-interested) beliefs - that only private firms possessed the intelligence and innovation to meet the new security challenge. Although it was true that the White House was on the verge of spending huge amounts of taxpayer money to launch a new deal, it would be exclusively with corporate America, a straight-up transfer of hundreds of billions of public dollars a year into private hands. The deal would take the form of contracts, many offered secretively, with no competition and scarcely any oversight, to a sprawling network of industries: technology, media, communications, incarceration, engineering, education, healthcare.

The Bush team, quickly moved to exploit the shock that gripped the nation to push through its radical vision of a hollow government in which everything from war fighting to disaster response was a for-profit venture.

Rather than the 90s approach of selling off existing public companies, the Bush team created a whole new framework for its actions. This feat required two stages. First, the White House used the omnipresent sense of peril in the aftermath of 9/11 to dramatically increase the policing, surveillance, detention and war-waging powers of the executive branch - "a rolling coup". Then those newly enhanced and richly funded functions of security, invasion, occupation and reconstruction were immediately outsourced.

Although the stated goal was fighting terrorism, the effect was the creation of the disaster capitalism complex - a fully fledged new economy in homeland security, privatised war and disaster reconstruction tasked with nothing less than building and running a privatised security state, both at home and abroad. The economic stimulus of this sweeping initiative proved enough to pick up the slack where globalisation and the dotcom booms had left off.

Bizarrely, the most effective ideological tool in this process was the claim that economic ideology was no longer a primary motivator of US foreign or domestic policy. The mantra "September 11 changed everything" neatly disguised the fact that for free-market ideologues and the corporations whose interests they serve, the only thing that changed was the ease with which they could pursue their ambitious agenda. As the New York Times observed in February 2007, "Without a public debate or formal policy decision, contractors have become a virtual fourth branch of government."

And so, in November 2001, just two months after the attacks, the department of defence brought together what it described as “a small group of venture capitalist consultants”. The mission was to identify "emerging technology solutions that directly assist in the US efforts in the global war on terrorism". By early 2006, this had become an official arm of the Pentagon: the Defence Venture Catalyst Initiative (DeVenCI). "We're a search engine," explains Bob Pohanka, director of DeVenCI. The role of government is merely to raise the money necessary to launch the new war market, then buy the best products that emerge out of that creative cauldron, encouraging industry to even greater innovation.

__________________Just coz you don't understand it
Doesn't mean it makes no sense!

Another is Counterintelligence Field Activity (Cifa), a new intelligence agency created under Donald Rumsfeld that is independent of the CIA. This parallel spy agency outsources 70% of its budget to private contractors; like the department of homeland security, it was built as a hollow shell. As Ken Minihan, former director of the National Security Agency, explained, "Homeland security is too important to be left to the government."

Every aspect of the way the Bush administration has defined the parameters of the war on terror has served to maximise its profitability and sustainability as a market - The document that launched the department of homeland security declares, "Today's terrorists can strike at any place, at any time, and with virtually any weapon," which conveniently means that the security services required must protect against every imaginable risk in every conceivable place at every possible time. And it's not necessary to prove that a threat is real for it to merit a full-scale response - not with Cheney's famous "1% doctrine", which justified the invasion of Iraq on the grounds that if there is a 1% chance that something is a threat, it requires that the US respond as if the threat is a 100% certainty.

The war on terror, is limited by neither time nor space nor target. From a military perspective, these sprawling and amorphous traits make the war on terror an unwinnable proposition. But from an economic perspective, they make it an unbeatable one.

That was the business prospectus that the Bush administration put before corporate America after September 11. The revenue stream was a seemingly bottomless supply of tax dollars to be funnelled from the Pentagon ($270bn in 2005 to private contractors, a $137bn increase since Bush took office), US intelligence agencies and the newest arrival, the department of homeland security.

In addition to the start-ups and investment funds, the disaster industry also gave birth to an army of new lobby firms promising to hook up new companies with the right people on Capitol Hill - in 2001, there were two such security-oriented lobby firms, but by mid-2006 there were 543.

Like the dotcom bubble, the disaster bubble is inflating in an ad-hoc and chaotic fashion. One of the first booms for the homeland security industry was surveillance cameras, 30m of which have been installed in the US, shooting about 4bn hours of footage a year. That created a problem: who's going to watch 4bn hours of footage? So a new market emerged for "analytic software" that scans the tapes and creates matches with images already on file.

And with all the snooping going on - phone logs, wire-tapping, financial records, mail, surveillance cameras, web surfing - the government is drowning in data, which has opened up yet another massive market in information management and data mining, as well as software that claims to be able to "connect the dots" in this ocean of words and numbers and pinpoint suspicious activity.

As an exuberant article in the business magazine Red Herring explained, one such program "tracks terrorists by figuring out if a name spelled a hundred different ways matches a name in a homeland security database. Take the name Mohammad. The software contains hundreds of possible spellings for the name, and it can search terabytes of data in a second." Impressive, unless they nail the wrong Mohammad, which often seems to happen, from Iraq to Afghanistan to the suburbs of Toronto.

This potential for error is where the incompetence and greed that have been the hallmark of the Bush years, from Iraq to New Orleans, becomes harrowing. Anyone can be blocked from flying, denied an entry visa to the US or even arrested and named as an "enemy combatant" based on evidence from these dubious technologies - a blurry image identified through facial recognition software, a misspelled name, a misunderstood snippet of a conversation. If "enemy combatants" are not US citizens, they will probably never even know what it was that convicted them, because the Bush administration has stripped them of habeas corpus, the right to see the evidence in court, as well as the right to a fair trial and a vigorous defence.

If the suspect is taken, as a result, to Guantánamo, he may well end up in the new 200-person maximum-security prison constructed by Halliburton. If he is a victim of the CIA's "extraordinary rendition" programme, kidnapped off the streets of Milan or while changing planes at a US airport, then whisked to a so-called black site somewhere in the CIA's archipelago of secret prisons, the hooded prisoner will likely fly in a Boeing 737, designed as a deluxe executive jet, retrofitted for this purpose. According to the New Yorker, Boeing has been acting as the "CIA's travel agent" - blocking out flightplans for as many as 1,245 rendition voyages, arranging ground crews and even booking hotels.

Once the prisoners arrive at the destination, they face interrogators, some of whom will not be employed by the CIA or the military but by private contractors. According to Bill Golden, who runs the job website IntelligenceCareers.com, "Over half of the qualified counter-intelligence experts in the field work for contractors." If these freelance interrogators are to keep landing lucrative contracts, they must extract from prisoners the kind of "actionable intelligence" their employers in Washington are looking for.

Then there is the low-tech version of this application of market "solutions" to the war on terror - During the invasion of Afghanistan, US intelligence agents let it be known that they would pay anywhere from $3,000 to $25,000 for al-Qaida or Taliban fighters handed over to them. Soon enough, the cells of Bagram and Guantánamo were overflowing with goat herders, cab drivers, cooks and shopkeepers - all lethally dangerous, according to the men who turned them over and collected the rewards.

According to the Pentagon's own figures, 86% of the prisoners at Guantánamo were handed over by Afghan and Pakistani fighters or agents after the bounties were announced. As of December 2006, the Pentagon had released 360 prisoners from Guantánamo (out of 759 held between 2001 and the end of 2006). The Associated Press was able to track down 245 of them; 205 had been freed or cleared of all charges when they returned to their home countries. It is a track record that is a grave indictment of the quality of intelligence produced by the administration's market-based approach to terrorist identification.

In just a few years, the homeland security industry, which barely existed before 9/11, has exploded to a size that is now significantly larger than either Hollywood or the music business. Yet what is most striking is how little the security boom is analysed and discussed as an economy, as an unprecedented convergence of unchecked police powers and unchecked capitalism, a merger of the shopping mall and the secret prison.

When information about who is or is not a security threat is a product to be sold as readily as information about who buys Harry Potter books on Amazon or who has taken a Caribbean cruise and might enjoy one in Alaska, it changes the values of a culture. Not only does it create an incentive to spy, torture and generate false information, but it creates a powerful impetus to perpetuate the fear and sense of peril that created the industry in the first place.

Part of the problem is that the disaster economy sneaked up on us. In the 80s and 90s, new economies announced themselves with great pride and fanfare. The tech bubble in particular set a precedent for a new ownership class inspiring deafening levels of hype. That kind of wealth is being generated by the disaster complex today, though we rarely hear about it. While the CEOs of the top 34 defence contractors saw their incomes go up an average of 108% between 2001 and 2005, chief executives at other large American companies averaged only 6% over the same period.

Peter Swire, who served as the US government's privacy counsellor during the Clinton administration, describes the convergence of forces behind the war on terror bubble like this: "You have government on a holy mission to ramp up information gathering and you have an information technology industry desperate for new markets." In other words, you have corporatism: big business and big government combining their formidable powers to regulate and control the citizenry.

__________________Just coz you don't understand it
Doesn't mean it makes no sense!